The Franchise King®

The 7 Most Important Factors to Consider When Choosing a Franchise

the 7 most important factors to consider when choosing a franchise

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Purchasing a franchise can be one of the most emotional, stressful, and exciting moments of your life. Dropping a check for $10K – $50K (or more) will be one of the scariest and most exhilarating purchases you’ll ever make.

Look, getting into business with your best friend is nerve wracking, let alone a giant, impersonal corporation who wants a fat startup investment. You’ve got to be careful.

(This post may contain affiliate links. Please read my disclosure policy).

I’m Bedros Keuilian, the CEO of Fit Body Boot Camp, American’s favorite 30-minute fat loss workout and the fastest growing fitness franchise, and I understand that franchising doesn’t always go the way people hope.

But I also need you to understand that if you get this decision right, owning a franchise can be one of the most rewarding paths to business ownership, financial independence, and ultimate freedom.

That’s why I always jump at the chance to work with franchise experts like Joel Libava and others out there who have dedicated their lives to helping people just like you make the right decisions for your future and your family.

I want you to experience the best franchising has to offer, not the worst…

Now, because you’re a reader of the Franchise King’s site I’m pretty sure you know how important it is to do this whole franchising thing the right way. So, for you and anyone else trying make an educated business investment, I’ve put together the following list.

Keep in mind that even though Fit Body Boot Camp is a fitness franchise, this list is NOT exclusive for those looking for fitness franchises… it applies to all types of franchise models.


The 7 Most Important Factors to Consider When Choosing a Franchise

Lets get to it… keep these 7 Key Factors in mind before signing any contracts so that franchising will transform your life for the way better rather than of the much, much worse:

#1 – The Cost Factor

Should be pretty obvious, but the first thing you’ve got to consider whenever you’re researching a franchise model is the Franchise Fee.

Of course, you can’t be immediately put-off by what appears to be a giant number. You’re playing in the big leagues now and we deal in big numbers up here. However, that big number better be followed up by big service, support, and systems.

But the truth is, franchisors aren’t trying to squeeze you dry and leave you hangin’. Here at FBBC, for instance, the franchise fee you pay to join our brand pretty much covers the cost of training, educating, and supporting you during your first few months… plus the cost of building out your website, getting traffic to it, and the cost of your pre-opening marketing blitz. Yes, we invest a lot of the franchise fee back into our owners.

I can’t speak for all companies but we do our best to make sure you have everything you need to succeed— crippling you with a ridiculous franchise fee is the polar opposite of our number one priority.

And that’s exactly why it’s so important for you to carefully consider the cost of any franchise and what you’re getting for that money. Not just because you shouldn’t spring for something you can’t afford but also because you need to make sure you’re getting your money’s worth.

Oh, one more thing for you…

Ever wonder why some franchises charge $50K, $60K or more? Do you really get that much more than the franchise who charges $20K-$30K? Not always. Some franchises use services to find them leads… nothing wrong with that. But these services operate like headhunters and ask for huge commissions to the tune of $15K to $25K per new franchisee they bring in. So the franchisor has to inflate their franchise fee and pass that cost on over to you.

Not cool.


#2 – Royalties

Here’s another issue that seems obvious but is often overlooked by most people.

Did you know that not all franchises require a percentage based monthly royalty? See, I honestly feel like that’s daylight robbery, punishing you for being successful.

Here’s how I see it… with a percentage based royalty fee each time you make more money, you pay more out to the Franchisor. As a franchisor I LOVE the sound of that! But as a human I think that if I work harder and increase my income I should not have to pay more royalties – unless the franchisor did something to help me increase my revenue. Otherwise I look at it as getting punished, which is how I feel about the taxes that I pay to the government for making more money.

That’s why I built FBBC with a flat-rate royalty so that it’s affordable your first months in business and pretty much negligible once your FBBC location starts rocking!

(By the way, if you’re interested in learning more about the Fit Body Boot Camp model and how we’re able to maximize fitness business profits then head on over to our site and learn what we can do for you.)


#3 – Co-op Marketing Fee

Another fee you’ll definitely want to ask about is called a Co-op Marketing Fee or just “marketing fee”. This one easily slips under the radar when you’re first getting started with a franchisor but can come back to bite you— hard.

First of all, it’s not optional. So make sure you get all the details regarding this one before you sign anything because you’ll be paying it for the rest of your time working with that brand.

Essentially, it’s cash that every franchisee must pay into one central fund that contributes to a national marketing budget. Oh and here’s the part that I love… the franchisor gets to keep up to 15% of that money they collected as a “marketing budget management fee”.

Don’t get me wrong… marketing is important and you gotta do it. And if that means that I as the franchisor have to make you do then so be it. But the truth is most franchisors don’t know how or where to spend your co-op marketing budget to actually get you leads, clients or customers. So they spend it on “branding” billboards or poorly produced ads and media.

You should ask around to find out exactly where your money is going and make sure those payments will be used on something that genuinely benefits your business. Or better yet, find a company that doesn’t require that you pay this fee.

At Fit Body Boot Camp, we never bully a franchisee into paying for a marketing fund because the way we see it, that’s why you pay a royalty fee every month. But that doesn’t mean we don’t have robust national marketing. In addition to that we also have added marketing services that we offer to our FBBC owners, but those are all optional and we actually track results so that if we’re not making you more money than you’re investing in marketing then we ask that you not use our marketing resources. What a crazy concept, right?

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(It’s always nice when you aren’t forced into paying a fee after you’ve already given tens of thousands of dollars…)


#4 – Success Stories

This is something Joel talks about all the time on this blog and in his videos and, as you might imagine, there’s a very good reason for that. Hearing from real people with genuine success using the model you’re interested in purchasing is one of the most crucial elements of choosing the right franchise.

Here’s what you should keep in mind: One success story does not make a perfect franchise. Yet conversely, one failure does not spell disaster for an entire model.

Here’s where your gut feeling is really going to come into play.

Hardly empirical, I know, but when you’re talking with current owners at a prospective franchise you have to make sure you’re getting a representative sample of what it’s really like. (This is also a great place to make use of Joel’s incredible advice. He’s the King for a reason, you know…)

Here at Fit Body we’ll hook you up with an owner or two (or ten for that matter) who we think you’ll be able to connect with, relate to, and learn from. But that doesn’t mean you shouldn’t do your own research.

Luckily we’ve nurtured massive networks, both online and live, where all of our owners can connect, share successes, learn, teach and grow. So if you really want to see what it’s like to be an FBBC owner we’ve got a vibrant community who would love to meet you.

Give us a call and we’ll make the introductions.


#5 – Done-for-You Resources

One of the main reasons anyone buys into a franchise is to get all of the resources, content and tools that an established model provides. But different franchisors have different definitions of “done-for-you.”

So find out exactly what you’re getting from any prospective franchisor making promises of easy cash and easy success.

Are you getting pre-made marketing resources like promotional emails, landing pages, websites, ads, Facebook marketing campaigns, images and posts that you can simply copy and paste? Or are you getting assets that you have to pay a designer, web developer, copywriter and manager to put to work?

Better yet, do they offer programs that automate the aspects of your business that you shouldn’t waste your time managing?

Personally, I work incredibly hard here to make sure you only need to spend your time doing the things that grow your business and increase revenue. I want to automate as much as I can so that you’re busy growing your empire and buying more locations.

That’s why FBBC does as much for its owners as possible.


#6 Corporate Culture

Here’s one you probably haven’t thought through yet…

Think about the franchise you’re interested in, think over all the interactions you’ve had with their sales team, marketing team, support team, etc., and in a few sentences sum up your impression of their corporate culture.

Are they supportive, dismissive, encouraging, intimidating, humble, haughty? Do they seem open to ideas in regards to policy or are they 100% by-the-rule-book kind of people?

Remember, these people will essentially be your business partners for the duration of your franchise ownership. When you need answers, solutions or assistance with your business it’s all going to filter through your corporate HQ so if you don’t jell with them at all you might run into some major problems.

Look, they don’t need to be your best friends, but they should be people you can see yourself working with.

Trust me, you don’t want to get stuck with an HQ run by people you can’t stand. They have major influence on your business, your income, your livelihood— if they negatively impact how you support your family and you can’t do anything about it, you’re not going to be happy.

So find the company that is in-tune with your philosophy of business or, if you admire how they do business, adjust your philosophy to fit the corporate you’re working with.


#7 Marketing Initiatives

Depending on the type of franchise you’re getting yourself into you may or may not be responsible for your own local marketing. Some of these brands are such huge players they do everything for you, and others rely on you to handle your own local marketing while they manage the big picture stuff.

Make sure you understand exactly what marketing initiative your HQ will be managing on a regular basis so that you know what you’re going to be responsible for marketing wise.

For instance, here at the FBBC HQ we handle all of the national and international marketing initiatives but we also provide valuable lessons, resources, and marketing promotions that transform each of our owners into maverick local marketers.

But if that’s really not your thing and you don’t want to bother with managing your own local marketing we offer additional services that automate everything so that you can focus on the things that matter most to you and your business.

The way we see it, franchisees buy into a model so that everything will be as easy as possible and we want to make sure that’s absolutely true for our owners.

So if you’re interested in learning more about what it takes to become an FBBC franchisee head on over to our website and fill out what we call an “Expression of Interest Form.”

This is how we get to know you and how you can get introduced to the way we do business. We want to make sure you’re right for us and we want you to do the same so get on our site today and send us your EOI. CLICK HERE 


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franchise article written by joel libava
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joel libava

I'm The Franchise King®, Joel Libava. I help prospective franchise owners avoid bank account emptying mistakes.
For 23 years, I’ve been showing people how to make smart, informed decisions on franchises to buy, and I can help you, too!
P.S. I'm not a franchise consultant/broker.

Joel is Highly Principled
There are many people in the franchise business who claim to to be experts in the field. Unfortunately many of them lack both knowledge and integrity. Joel, however, is without question one of the most qualified and principled people I know, in or out of his industry."
- Greg Reynolds, Retired Outplacement Counselor
"Many receive advice, only the wise profit from it."
- Harper Lee

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